LONDON (Reuters) - Independent energy supplier, Good Energy, said on Thursday it would freeze power prices this winter, following in the footsteps of “big six” rival SSE (LON:SSE) and putting pressure on other suppliers to do the same.
British wholesale gas and electricity prices have risen about 30 and 40 percent respectively since June, along with a bounce-back in other commodities such as coal, leading to speculation that some electricity suppliers could raise prices.
Good Energy said its gas and electricity prices will be frozen until March 2017.
The move mirrors a pledge made by SSE earlier this month, to freeze standard prices until April 2017, and turns up the heat on "big six" rivals Iberdrola (MC:IBE)'s Scottish Power, Centrica (LON:CNA)'s British Gas, RWE's npower , E.ON and EDF (PA:EDF) Energy , not to up their prices this winter.
Energy bills have doubled in Britain over the past decade to about 1,200 pounds ($1,640) a year, and the chancellor said earlier this week during the autumn statement, the government could intervene in the market if it believes prices are too high.
David Brooks, Good Energy's Managing Director, said some fellow independent firms may not be able to absorb the recent rises in the wholesale gas and power markets.
"Wholesale power prices have spiked and, unless they had the ability to forward buy their power in times when it was cheaper; it is inevitable that those loss-leading suppliers will put their prices up," he said.
Fellow independent firm OVO Energy increased its prices earlier this month, due to the higher wholesale costs.
Small energy suppliers have been taking customers from Britain's "big six" over the past few years, and were able to offer cheaper deals due to lower operating costs.
However, their smaller size means they have less protection from rapid rises in wholesale power and gas prices, narrowing the gap in the discount they are able to offer.